sap mrp - materials requirements planning (1)

8/12/2019 SAP MRP - Materials Requirements Planning (1)

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SAP MRP(Materials requirement planning)

By-Balamurugan


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Topics

1 What is MRP

2 Master data for MRP

3 MRP Procedures

4 Planning Process

5 Lot sizing Procedure

6 Traffic lights

7 ATP (Available to Promise)


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What is MRP..

The main objective of MRP is to guarantee material availability.

MRP is required to procure or produce the required quantities on

time for internal purpose or for SALES.

WHY MRP ? Optimizing service level Minimizing costs and capital lockup.


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MRP can be done in several ways:

MRP at plant or MRP Area level With MRP at plant level, the system considers stocks from the storage locations within the plant, excluding the stocks already reserved.

In case of MRP area level, the stocks from the storage locations belonging to this MRParea as defined can be taken for planning to generate the requirements.

MRP area planning helps in cases where one wants to restrict the planning to certain storage locations.

Lot-Sizing and MRP Procedures

Different lot sizing can be combined with different MRPs.

Automatic Planning Run This is done automatically wherein the requirements are generated. The system generates messages in case of critical situations which can be addressedlater after the run.


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Process Flowchart

MRP

Dependentrequirement

Dependentrequirement Planned order

Independentrequirements

SD Processing

Conversion

CAPACITY PLANNINGProduction Order

Order Processing

FINALCOSTING

Purchase Schedulingrequisition Agreement

Purchasingfunctions

Purchase Orders

INVOICE VERIFICATION

Warehouse


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Process flowchart


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MRP Process flow

S & D gives concrete customer requirements from the market.

In Demand Management, sales are planned in advance via asales forecast. Theresult is the independent requirement, i.e., the requirement for the finished product.

In order to cover these requirements, MRP runs and calculatesprocurement

quantitiesanddatesas well as plans the corresponding procurement elements.

If a material is produced in-house, the system also calculates the dependent

requirements, that is, the quantity of components required to produce the finished product or the assembly, by exploding the BOM. If a material shortage exists,planned orders are created at every BOM level to cover requirements.

Production orders or Purchase orders are created.


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Master data for MRP

The following elements are required for MRP:

Material master

Bills of material Work centre ( in-house production)

Routings ( in-house production) Demand management Sales and distribution (optional)


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Topics

1 What is MRP


3 MRP Procedures

4 Planning Process


6 Traffic lights



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MRP Procedures

Material requirements planning

Master production scheduling

Consumption based planning


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Material requirements planning

1. It uses current and future sales figures.

2. The system calculates the requirements based on the warehouse stock,receipts, etc.

3. If externally procured then procurement proposals; if internal productionthen it leads to creation of planned orders, and also dependentrequirements are calculated.

4. The best thing about this is that it leads to minimization of inventory,which leads to reduction of costs involved.


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1. It is for used specifically for critical resources.

2. A separate run occurs for the MPS items, they are not included in theMRP run.

3. Basically, it ensures the availability of the critical resources which shouldnot hamper the production by maintaining the stock

4. It also provides the facility to work on the production plan interactively.


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Consumption based planning

1. It uses the past consumption data to calculate the future requirements.

2. It has no relation with the independent or dependent requirement

instead it is triggered when the stock falls below the reorder point or by

forecast requirements.

It has three types of MRP procedures:

Re-order point planning. Forecast based planning.

Time phased planning.


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Re-order Point Planning

Procurement is triggered when the sum of plant stock and firmedreceipts fall below the reorder point.

Reorder point covers the material requirements during replenishmentlead time.

The safety stock takes care of both excess material consumption withinthe replenishment lead time and any additional requirements that mayoccur due to delivery delays


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Re-order point is defined by :-

Safety stock

Replenishment lead time. Average consumption.

Safety stock is defined by :

Past consumption data.

Vendor/ production delivery timelines.

Service level. Forecast error.


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Manual Reorder point planningFormula=(procurement processing time+planned delivery time+GR

processing time) + Safety stock

Automatic reorder point planning


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Brief of some MRP Types

Some of the major types:

MPS

M0- MPS

MRP

PD- MRP

Time phasedR1- Time-phased planningR2- Time phased w. auto.

reo. pt

Consumption basedV1- Manual reorder ptV2- Auto. reorder ptVV- Forecast based planning


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Forecast based planning

It is also based on historical data, or the past material consumption data.

Here the forecast values form the basis of the planning run.

Based on the consumption pattern the system changes the forecastrequirements for future.


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Planning file

1. The Planning file contains the details of the materials that are to beincluded for the MRP run.

2. MRP is to be activated for the plant, an entry for the material is to bemade in the planning file for the specific plant for the MRP to happen.

3. MRP Run for a material occurs taking the information from the planningfile.

T-Code for creating planning file MD20

& in the background MDABActivate MRP & setup planning OMDU

file


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Planning run type

Planning run type depends on the processing key in the MRP run screen

There are three types of processing key

NETCH (Net change planning in total horizon) NETPL (Net change planning in the planning horizon)

NEUPL (Regenerative planning)


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Planning Run Type- NETCH

1. In this run, the system considers those materials in the planning runfrom their last MRP run in the total horizon.

2. But then it depends if there was any change in

Change in stock.Creation of PRs; POs; etc.

Any changes pertaining to receipts & issues.


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Planning Run Type- NETPL

1. In this run, the system considers those materials in the planning runwhich have undergone any change in the planning horizon as defined.

2. Here the number of materials to be taken for MRP Run can berestricted by defining the planning horizon.


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Planning Run Type- NEUPL

1. It plans all the materials for the MRP Run irrespective of the changesthey undergo.

2. This plan is not so widely used. It takes a long time to obtain thefinal result.


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MRP 1


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MRP 2


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MRP 3


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MRP 4

T i


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Topics

1 What is MRP


3MRP Procedures

4 Planning Process


6 Traffic lights



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Planning Process

The system checks the planning file

The system calculates the net requirements for every material. The system calculates procurement proposals.

Scheduling happens. The system determines the type of procurement proposals. During MRP run, the system checks some critical situations which need to

be worked manually and hence it creates exception messages.

Planning can also happens at:

Storage location MRP Areas

Multi Plant/Site planning


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Planning Run

It can be run for a plant, group of plants, an MRP area, or several MRPareas.

For a single material or product group.

Planning run can be:

Total planning

Single-item, single level planning Multi-level, single item planning

Interactive planning

Multi-level, make-to-order production Individual project planning

The system creates procurement proposals which can be planned orders,

purchase requisitions, schedule lines.


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Planning time fence & planning horizon

This is specially useful in case of MPS scenario where one can save theprocurement proposals from undergoing any change since the lastplanning run.

No automatic changes happen to the procurement proposals once theyenter in the planning time fence.

Planning horizon is the period in which the materials which haveundergone any changes are taken into MRP run.


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Stock requirement list (T-CodeMD04)


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Create PIR


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Stock requirement list after creating PIR


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MRP RUN (T-CodeMD02)


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MRP RUN Output


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Topics


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Topics

1 What is MRP


3 MRP Procedures

4 Planning Process


6 Traffic lights



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Lot Sizing Procedure


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Static Lot Sizing Procedure

In this, the procurement quantity is calculated based on thespecifications mentioned in the material master.

The different procedures in this are:-

1. Lot for lot

2. Fixed lot size3. Fixed lot size with splitting & overlapping

4. Replenishment up to maximum stock level.


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Optimum Lot Sizing Procedure

In the static or period lot sizing, the cost are not taken intoconsideration.

Here the requirements are grouped together in a way which will reducethe cost.

Topics


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Topics

1 What is MRP


3 MRP Procedures

4 Planning Process


6 Traffic lights



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Traffic lights


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Topics


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Topics

1 What is MRP


3 MRP Procedures

4 Planning Process


6 Traffic lights



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ATP (Available to Promise)

1. During ATP, the system checks that all issues are covered by existingreceipts

2. Hence, if any quantities are left to cater new issues. This isATPQuantity.


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Availability check

Availability Check at Storage Location Level


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Availability check

Availability Check at Batch Level

If only one batch is entered, the check is carried out on two levels, firstagainst the batch and then against the plant stock.

If a batch and a storage location are entered, the check is carried out onfour levels, first against the batch storage loc ation, then against thebatch, the storage location and the plant stock.

Availability Check for Individual Customer Stocks and Project Stocks

Individual customer stocks and project stocks are maintained separately inthe system and are not contained in plant stock. If an issue is madefrom individual customer stock or project stock, the availability is

checked only for this particular customer stock.

sap mrp - materials requirements planning (1)

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